Something Borrowed

Small-business owners who have never borrowed money are usually
proud of that fact, but sometimes not taking out a loan can hurt
you.

"Borrowing money is necessary for most growing companies.
That's the way small businesses break out and become
larger," says Tom Kellogg, president of Hartford,
Connecticut-based Business Lenders Inc. The company, which has
offices in Connecticut, Massachusetts, New Jersey, New York and
Rhode Island, is one of the Northeast's most active Small
Business Administration lenders.

A loan can also help companies that have problems paying bills
or need to pay off creditors and improve cash flow.

When should you think about seeking a loan? Business Lenders has
identified nine instances when you should consider a loan. The top
three:

1. You want working capital to add employees, increase long-term
sales and generally help the business grow. "Companies can
grow using internally generated capital, but it might be much
slower growth, and they will be exposed to risk for an extended
period," says Kellogg.

2. You want to increase your market share. To carve out a larger
share of the market, you may need to offer more favorable terms to
customers and take on new ones who are creditworthy but slow
payers.

3. You want to take advantage of early-payment discounts.
Suppliers may offer discounts on invoices paid within 10 days
instead of the standard 30.

Other reasons to consider a loan are to purchase new equipment,
refinance existing debt, establish a relationship with a lender,
buy a commercial building or hedge against a downturn in
business.

On-Site Planning

If you're confused about retirement planning, a trip online
could help. Diversified Investment Advisors and Aetna Retirement
Services have each created interactive Web sites to educate users
about retirement savings options.

The Diversified Web site (http://www.divinvest.com) uses
simple games to help users understand concepts and provides
worksheets users fill out to determine risk tolerance. The
worksheets use variables such as age, current income, expected
retirement age and retirement goals to calculate how much money you
should save annually to meet retirement needs.

The Aetna Web site (http://www.aetna.com/financial/investment)
is geared toward people who already have a basic understanding of
investing. It uses interactive tools to identify users' risk
tolerance, then creates a sample portfolio. Aetna says the site
works just as effectively for those with $100 to invest as it does
for those with $100,000. Users can also analyze their current
savings accounts and investments to see where changes are
needed.

Border Crossing

If you're investing solely in the U.S. market, you could be
taking unnecessary risks, says Paul Melton, publisher of TheOutside Analyst newsletter, which compares stocks from more
than 15,000 companies in 42 countries.

"[The danger is] market risk, which is anywhere from 25 to
50 percent of total risk, and stems from the tendency of stock
prices in any one market to rise and fall in unison," explains
Melton. (Nonmarket risk, on the other hand, is risk inherent in the
company, such as a management scandal or a drop in earnings.)

To reduce market risk's effect on your portfolio, Melton
advocates investing globally, which he explains further in his new
book, The Financial Times Investor's Guide to Going Global
With Equities: Make Investment Gains Across Frontiers (Pitman
Publishing). The book targets long-term conservative investors with
a minimum time frame of three to five years.

Melton recommends you don't begin global investing until you
have $250,000 to invest, but adds that those with less than that
can go the mutual or closed-end fund route. His book explains those
options as well as other ways of investing in foreign shares,
including direct purchase through foreign stock exchanges.